Correlation Between Fresenius Medical and Albion Technology
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Albion Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fresenius Medical and Albion Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresenius Medical Care and Albion Technology General, you can compare the effects of market volatilities on Fresenius Medical and Albion Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fresenius Medical with a short position of Albion Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Albion Technology.
Diversification Opportunities for Fresenius Medical and Albion Technology
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fresenius and Albion is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Albion Technology General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albion Technology General and Fresenius Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fresenius Medical Care are associated (or correlated) with Albion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albion Technology General has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Albion Technology go up and down completely randomly.
Pair Corralation between Fresenius Medical and Albion Technology
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 2.65 times more return on investment than Albion Technology. However, Fresenius Medical is 2.65 times more volatile than Albion Technology General. It trades about 0.04 of its potential returns per unit of risk. Albion Technology General is currently generating about 0.01 per unit of risk. If you would invest 3,570 in Fresenius Medical Care on November 9, 2024 and sell it today you would earn a total of 1,148 from holding Fresenius Medical Care or generate 32.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Albion Technology General
Performance |
| Timeline |
| Fresenius Medical Care |
| Albion Technology General |
Fresenius Medical and Albion Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Albion Technology
The main advantage of trading using opposite Fresenius Medical and Albion Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Albion Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Albion Technology will offset losses from the drop in Albion Technology's long position.| Fresenius Medical vs. The Mercantile Investment | Fresenius Medical vs. Lowland Investment Co | Fresenius Medical vs. Kinnevik Investment AB | Fresenius Medical vs. Bankers Investment Trust |
| Albion Technology vs. Grand Vision Media | Albion Technology vs. G5 Entertainment AB | Albion Technology vs. Flutter Entertainment PLC | Albion Technology vs. Compagnie Plastic Omnium |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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